MLB team owners haven’t done themselves any favors lately, as several of them went to the press to cry poor. Cubs owner Tom Ricketts said last week that owners’ losses during the pandemic shutdown have been “biblical.” He also said that generally, “The league itself does not make a lot of cash.”
Diamondbacks managing general partner Ken Kendrick went on Arizona radio earlier this week to continue defending the ideas of revenue sharing and a salary cap. Cardinals owner Bill DeWitt Jr. went on St. Louis Radio earlier this week and said, “The industry isn’t very profitable, to be quite honest.”
These comments came against the backdrop of ongoing negotiations between the owners and the MLB Players Association pertaining to a 2020 season. Though there have been weeks of trading ideas back and forth, the two sides have yet to reach an agreement. As Craig explained recently, this is solely because the owners are being obstinate. Among other things, the owners want a shorter regular season and for the players to agree to further pay cuts, even beyond those agreed to back in March. The players want a longer season and a larger share of their salaries.
Nationals starter Max Scherzer, a member of the MLBPA executive subcommittee, responded publicly to the league’s desires. In a tweet, he wrote, “There’s no reason to engage with MLB in any further compensation reductions.” He also suggested the owners open their books to prove their claims of economic distress.
Scherzer is not an outspoken player when he’s not on the mound. He rarely offers a controversial opinion or combative thought that doesn’t involve him blowing a 98 MPH fastball past a batter. For him to comment publicly about this exemplifies just how tense things are labor-wise in baseball.
Scherzer responded again, this time to the owners’ recent claims of the sport not being profitable. He tweeted, “Some owners have mentioned that owning a team isn’t very NET profitable.. You know what other company isn’t very NET profitable? Amazon.”
Indeed, Amazon reported net income of just over $11.5 billion in 2019. The business itself was valued at $1 trillion earlier this year. Aside from the Braves, as the team is publicly traded, it’s impossible to know exactly which baseball teams are net profitable and by how much because the owners keep their books closed to the public.
We do know, however, that the league set a revenue record for the 17th consecutive season last year at $10.7 billion and we know that every baseball team is worth at least $1 billion. Even the Marlins, arguably baseball’s poorest franchise, provided incredible value for former owner Jeffrey Loria. Loria bought the franchise for $158.5 million for the Marlins in 2002, then sold the team in 2017 to Bruce Sherman and Derek Jeter for $1.2 billion. That’s about a 7.6-to-1 return on investment. Former Royals owner David Glass bought the team for $96 million in 2000 and sold it to John Sherman last year for $1 billion -- a 10-to-1 ROI. Owners wouldn’t be purchasing MLB teams, including some within the last five years, if the sport weren’t profitable.
If the owners want sympathy from players, from the media, and from fans, then they have to provide transparency. Dating back to the formal organization of the sport, owners have been decidedly opaque -- and at times actively misleading -- about their financials. Anything they say should be considered with the utmost skepticism until they open their books.
